Posted
by
timothy
on Saturday July 09, 2011 @07:29AM
from the new-old-meaning-for-spend-a-penny dept.

itwbennett writes "The Army's $2.4 billion SAP project is delayed, over budget, and, once implemented may not even meet its original objectives, according to a recent auditors' report. For its part, the Army is less concerned with the auditors' findings about the project that will manage a $140 billion annual budget and serve nearly 80,000 users once it is complete: 'The Army believes the risks identified in this report are manageable and do not materially impact the [project's] cost and schedule,' said an official with the Assistant Secretary of the Army (Acquisition, Logistics, and Technology)."

They probably hired a big, fat consulting company like Accenture to implement SAP for them, who's in it to get even fatter by putting as many unqualified warm bodies on a contract as possible, rather than hiring a someone who will actually run it like a project and get out... someone who is actually concerned about the customer's best interests. One would hope that the Army would know better.

c) They still believe in Waterfall development methodology. They also believe in "fixed-price" contracts. It's the change requests that kill you. The consultants gladly build what you asked for. Then when you realize that you really didn't know what you wanted, they have you.

Because it's not their money, and they're not spending it upon themselves.

Milton Friedman identified 4 types of spending:

Spending your money on yourself. You'll get what you perceive is the best value.

Spending your money on someone else (like a present). You'll be quite careful how much you spend, but perhaps less careful about what it goes on

Spending other people's money on yourself (you're given a budget to buy a PC). You'll buy the best thing you can, but not care too much about value

Spending other people's money on someone else (most government spending). You don't care about how much is spent, nor do you care too much about what its spent on

I've done work on government projects and seen money thrown at projects that made absolutely no sense at all. Projects that just fizzled out or never got implemented. It doesn't happen in the competitive private sector. People do a project because it makes/saves money, and then make it work.

Well, I'm a consultant working primarily for government, and I can honestly say that those aren't the reasons why these projects fail.

Corruption in hiring is surprisingly rare in western countries, and usually involves only a small subset of the people on a large project. I've heard it's a serious problem in developing countries, but I've only seen it a few times here, and and I've only ever seen it lead to a project failure when the project team was only a handful of people.

You'd be surprised about the work ethic of consultants.

For some consulting organizations, there's so much work that they prefer to have their consultants finish projects quickly so that they can go on to other projects and hence satisfy all of their customers, not just some of them. Not turning up at all is a surefire way of losing a customer to your competition, which can go from nonexistent to serious in very little time if they suddenly start landing big projects.

More commonly, consulting is only a part of what a company does. Large vendors like SAP sell licenses, support contracts, and consulting separately. If one branch of the company starts annoying the customers (too expensive, slow, incompetent, etc...) then this drags down the results of other branches too, and then their executives become very angry and complain directly to the CEO. God help the consultant working for an organization that makes most of their profit from licenses if the fuck up a sales deal!

Lastly, consulting firms tend to hire better-than-average people, and those tend to be high achievers and motivated professionals. Delivering projects on time and on budget looks good on a CV, and can lead to even more lucrative positions.

I've seen enough projects that I've figured out that government contracts go over budget or time for several inter-related reasons:

- Ridiculous levels of risk aversion -- if there's no bonus or profit to be had, then no risk is worth it. This leads to some very stupid decisions, over-engineering, etc...- Management overhead -- big bureaucracies ignore the cost of management overhead, because the only way to reduce it is to fire a bunch of managers, but management makes hiring and firing decisions! Almost nobody would ever fire themselves. Instead, managers rationalize the need for management. There's no arguing with people about useless processes, when the existence of that process, useful or not, keeps them employed.- Conservative approach to IT -- a big project is hard enough, but when you also have to deal with decades old software and sometimes even hardware, the difficulty becomes astronomical. In quite recent times, I've come across all sorts of fun things in the core infrastructure of large organizations. For example, OS/2 is still in use. Novell NetWare refuses to die. I've seen Windows 95 as a server in a data center just recently. I did a lot of work on an enterprise DOS application just a couple of years ago. It's not just systems, but processes to. Why change anything, just because the software is completely different, and the hardware is six orders of magnitude bigger or faster?

So imagine being the consultant hired to rip up and replace 10s of millions of lines of code across hundreds of undocumented systems, most of which should have been cleansed with purifying fire decades ago, but you're not allowed to. Instead, you have to sit patiently through a never ending series of pointless meetings that serve only to prevent any bureaucrat from ever having to make a decision, or take any blame for anything.

Yep, never been involved in any SAP implementations but I've seen several. Not one was completed anywhere near the deadline or original budget. Additionally, none of the companies got what they thought they were going to from it (always decreased deliverables). Mind you this is a relatively small implementation pool (5 companies) but zero successes is not a good sign.